If you have a rental cottage in Muskoka, you’ll soon need a licence to legally operate it.
On January 1, 2025 the Township of Muskoka Lake’s new Short-Term Rental Accommodations Licensing By-law will come into effect. Short-term rentals are defined as those that lease for 28 days or less.
The new policy, which was approved in August, requires all new and current short-term rental operators to obtain a licence to legally operate it in Muskoka Lakes. Licences will be obtained from the Muskoka Lakes Township beginning early next year.
“As a result of continuing concerns in Muskoka Lakes, Council initiated a process to regulate short term rental accommodations,” said Muskoka Lakes mayor Peter Kelley in a press release. “Our hope is that when this by-law is fully implemented, we see a decrease in the number of community concerns.” These community concerns include things like large, noisy parties and unruly cottage renters.
“Short-term rentals in many places have been in the news in recent years, with legislation taking place in municipality after municipality because neighbours are concerned about the noise and disruption of short-term rental guests next door,” says Jayne McCaw, Founder of Jayne's Luxury Rentals. “There’s very few poorly-run short-term rentals in Muskoka. On average, there are about 10 complaints per year, and the same owner is responsible for two or three of these. So, the licence requirement is a means to address these few culprits – and dissuade others from behaving the same way.”
Muskoka (Shutterstock)
Muskoka (Shutterstock)
According to the press release, the changes were initiated by the Township to ensure that all short-term rentals preserve neighbourhood character and operate safely in accordance with Fire Protection Standards and the Ontario Building Code. All short-term rental licences will be subject to a demerit system, where if 15 demerit points are accumulated, the licence would be revoked.
“This new licence requirement forces people to register their property as a rental,” says McCaw. “The people who register their properties are the ones who really are concerned about who is renting their properties. These are the people who are doing things right. This will offer a legal framework to penalize those who aren’t doing things right. Before that, there was no financial penalty for unregistered short-term rentals. With a licencing system, you can go out and find the culprits of the bad rentals, those who aren’t concerned about the happenings of their short-term rental or how it impacts their neighbours.”
The new licencing legislation comes with a lengthy list of rules that some have criticized for being too restrictive. For example, gone are the days of renting out a cottage for a weekend stay. Now, all properties must be rented out for a minimum of seven nights in June, July, and August – a move that renders the region's pristine lakes out of financial reach for some would-be renters (these cottage rentals aren't cheap in prime time).
Red muskoka chairs on a dock at at sunrise in the fog
storeys.com
“Muskoka is one of the largest tourist areas for cottage regions in the country,” says McCaw. “Putting these minimum stay rules into place could impact the region’s tourism dollars. People aren’t going to be able to spend as much and it could eventually impact cottage owners, if the number of small local businesses starts to decline due to fewer tourists. There needs to be a balance between the needs of tourism and the needs of the owners in the area.”
With prices for cottages so high in Muskoka, renting out a property is now common in the region as a way to offset some of the carrying cost. For some, it's the only way cottage ownership makes financial sense.
For those interested, the Township is set to host a virtual webinar on December 10 to share more information about the new requirements.
